New Bankruptcy Laws 2005, effective October 17, will make it more difficult to discharge your debts by filing bankruptcy.

Changes to the law in the form of The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, are due to complaints by the banks and other financial institutions who cite abuse of the bankruptcy laws by financially irresponsible consumers.

Worries, however, abound that the New Bankruptcy Law will leave the most vulnerable in society - namely, the elderly, low income families and single mothers - with no protection against unmanageable debts due to job loss or other unforeseen circumstances.

Changes to the law in the form of the new bankruptcy laws of 2005 are as follows:

1. To escape the new law, your income must be below the median of income for families of the same size in the state where you live

2. You will be required to undertake a means test (based on income and expense) to ascertain whether or not you qualify for "debt forgiveness" (provided currently under Chapter 7 Bankruptcy)

3. If the bankruptcy court believes you have enough spare income each month to set aside for repayment of debts, you may be required to file Chapter 13 Bankruptcy, which will mean automatic participation in a debt repayment plan over 3-5 years

4. Under the new bankruptcy law, you'll be required to undertake debt counseling under Section 106

Under Chapter 7 bankruptcy, you are allowed to protect part of the equity of your home from creditors, as determined by the state laws where you reside. From the date of the changes, however, the new bankruptcy law overrules some of these exemptions. Subject to filing time limits, the exemption for your home is limited to $125,000.

The new bankruptcy laws of 2005 also affects businesses who file for bankruptcy.
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Debt Stacking - How To Get Out Of Debt Fast! Did you know that HOW you pay your debts can dramatically affect how quickly you reduce debt - even if you make the same payment each and every month? Copyright © 2005 Andy Ballentine and 1st-Netcard.com. All Rights Reserved. Please note: This Resource Box MUST be included with article.

Andy Ballentine and 1st-Netcard.com

bankruptcy reform

The first but definitely not the easiest thought that comes to most people when they are neck-deep in debt is to file bankruptcy. Filing bankruptcy seems to be the last straw left in the deluge of unpaid bills and abusive creditor calls. The situation is somewhat like this. You buy whatever catches your fancy and you thank yourself you had the blessed credit cards. It's good as long as you are spending. When it's paytime, you realize your misdoing. Abusive creditor calls may be robbing you of your sleep. Things may go so wrong that being repentant also does
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According to the American Bankruptcy Institute "household debt is at a record high relative to disposable income." The Administrative Office of the U.S. Courts reported that the number of filings for the year ended March 31, 2003 "exceeded 1.6 million for the first time in any 12 month period," a 15.1 percent increase from the previous year. There are two basic types of personal bankruptcy: Chapter 7 and Chapter 13. Chapter 7 Bankruptcy and Chapter 13 are legal proceedings that are available to a person to cope with a financial crisis. Personal bankruptcy must be filed in a
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